To launch a Cryptocurrency-related business in Dubai, an investor must first form a company with the Dubai Multi Commodities Center (DMCC) and then obtain a Cryptocurrency License to conduct the required business operations. With a Crypto License in DMCC (UAE), an investor can provide cryptocurrency-related services to clients (storage, management, trading, Bitcoin solutions, software applications, advisory, services, etc.)
In the United Arab Emirates, cryptocurrency licenses are currently restricted by severe rules imposed by both the UAE government and the Central Bank. It is projected to become a mainstream business area in the future.
The UAE has achieved incredible progress in new technology fields such as blockchain and cryptocurrencies. The newly released Blockchain Strategy 2021 and the Crypto Centre created by the Dubai Multi Commodities Centre (DMCC) free zone are two remarkable instances of the UAE’s leapfrogs in terms of growing digital innovation. We may readily presume that the environment of company establishment in Dubai, UAE is suitable to crypto enterprises at a time when the government is promoting the crypto industry.
The DMCC Crypto Centre enables investors to establish a crypto-based business within the free zone. To encourage the establishment of crypto firms in Dubai, DMCC has built suitable infrastructure, tough rules, and facilities. However, before diving in, investors should familiarize themselves with the rules, regulations, and processes for establishing a crypto firm in the DMCC free zone.
Types of Crypto Licenses in Dubai Multi Commodities Centre (DMCC)
A crypto license issued by the DMCC Free Zone Authority is required to start a cryptocurrency company. Based on the nature of the company activity, DMCC presently grants two crypto licenses.
Types of crypto licenses issued by DMCC in Dubai:
- Crypto Trading License
Companies who perform proprietary trading in Crypto commodities are granted a Crypto trading license. The buying and selling of crypto commodities created on distributed ledger technology applications is covered by this sort of DMCC Crypto license. Companies engaging in operations such as a crypto exchange, crypto brokerage services, financial services, banking services, payment processing, or storage services will not be granted a license by DMCC.
Only after receiving prior clearance from the free zone management may you receive a crypto license in DMCC. The DMCC Authority has structured the proprietary trading in Crypto commodities license as a stand-alone license that cannot be used in conjunction with other operations within the same organization. A minimum share capital requirement of AED 50,000 applies to the issuing of this type of crypto license in DMCC.
- Distributed Ledger Technology Services
The Distributed Ledger Technology Services license allows you to do things like provide database management solutions and associated services using distributed ledger technologies like blockchain. Any firm that engages in these activities is prohibited from trading in currencies or cryptocurrencies, setting up an exchange, or providing financial activity services, brokerage, or payment processing.
Dubai’s Crypto Firms Regulations and Compliance Requirements in 2022
The DMCC and the Securities and Commodities Authority (SCA) have signed a Memorandum of Understanding (MoU) to develop a regulatory framework for crypto firms operating in the free zone. As a consequence, in 2022 the DMCC now has a solid framework in place to sell, issue, list, and trade crypto assets in accordance with SCA laws. Companies who want to start a crypto company in DMCC must meet the following compliance requirements:
- Must prove capital to run the company for at least 6 months
- Compliance with strict KYC regulations
- Companies must comply with the UAE Anti-Money Laundering and Terrorist Financing Act (AML-CFT).
- Ultimate beneficial ownership (UBO) disclosure
Eternity Law International can help you obtain a Crypto License in DMCC (UAE)
Blockchain and cryptocurrencies are gaining more and more popularity, which attracted a lot of investors to Dubai. The business environment in Dubai is ideal for launching a cryptocurrency venture, since the government provides excellent regulatory assistance. Due to the complicated nature of crypto operations, investors may want the support of skilled advisers to manage the process of business creation in DMCC.
If you would like to obtain a crypto license in UAE or another jurisdiction you are interested in, contact our specialists for detailed advice or write to us in the CRM form at the bottom of the page, our specialists will answer you online.
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